The federal government extended a $40-million rescue package to Alcoa, which allowed the firm's Point Henry plant to remain open for at least two more years until July 2014.
In the process, 540 workers were spared from joining the ranks of the unemployed due to the unprofitable smelter operations. The plant actually has 600 workers, but 10 per cent of them or 60 workers will have to go under a redundancy programme which would be implemented as quickly and voluntarily as possible.
Aluminum was the only metal to close higher on the day, up 0.7% at $1,866/ton. U.S. oil futures plunged to their lowest level all year, while the European benchmark neared $100 a barrel, after a disappointing reading on Chinese economic growth raised concerns over oil demand in the world's second-biggest consumer. An Alcoa employee works on a crane in front of an alumina silo in Alcoa Fjardaal aluminum smelter, eastern Iceland, in this file photo.
The rescue package was released on the condition that the plant would remain open for the next 24 months and productivity would be kept at comparable level, disclosed Industry and Innovation Minister Greg Combet. The assistance followed Alcoa's announcement in February that it is reviewing the plant's operations and future because of falling aluminium prices and the high Australian dollar.
Alcoa Australia Chairman and Managing Director Alan Cransberg said the firm could keep losses to a minimum by pursuing more savings and investing in repairs and maintenance. Among the things that needs to be in Alcoa's favour when the firm tackles its future beyond July 2014 is the foreign exchange rate and metal prices, he said.
Besides Canberra's assistance, Victoria also set up a $4-million industry fund to assist Alcoa contractors and suppliers modernise, particularly for its supply chain to improve efficiency and productivity.
The fund is open to other businesses in the Geelong region to help improve their productivity, said Victorian Premier Ted Baillieu.
Union leaders emphasised the importance of keeping the plant's operational not only for Alcoa employees but also for the manufacturing industry in Australia.
"If we don't make aluminium in this country, if we don't make steel in this country, there is no hope for us to have a manufacturing industry. Without base metals we can't build cars, we can't build wind farms, we can't build solar panels," Paul Howes of the Australian Workers Union told ABC.
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